Soon, payment options like paying house or shop rent, society fees, tuition fees and vendor fees through cards may be discontinued.
Reserve Bank of India (RBI) can take a big decision regarding payments through credit cards. It is being told that soon payment options like paying house or shop rent, society fee, tuition fee and vendor fee through card may be stopped.
RBI expressed objection
RBI has objected to this. The Bank believes that the credit card is designed for commercial payment by the customer to the merchant and not for personal transactions. RBI clearly says that if there is a transaction other than the customer and the businessman, then the person receiving the money will also have to open a business account. There is a lot of difference in the rules and standards of both, so it will be necessary to follow it.
Its use increased
In the last few years, people have started using credit cards more for this type of payment. According to RBI, around Rs 1.5 lakh crore was paid through credit cards in February alone. There has been an increase of 26 percent on annual basis. The bulk of this payment is related to rent payments, tuition fees, and society fees.
This is how it is used
In the last few years, many such fintech companies have come up which offer the option of paying rent through credit card. For this, a special (escrow) account of the credit card holder is opened. The amount is added to the card and then sent to the homeowner’s bank account. These companies charge one to three percent for this facility.
Such benefits to customers
This provides many benefits to credit card holders. For example, even if there is no cash, there is a chance of 50 days on such payment. Many credit card companies also offer cashback and reward points on it. Some companies also waive the annual fee as per the expenditure limit.
Banks became alert
After RBI came into action, banks have become alert and have started efforts to stop such payments. Many banks have stopped giving reward points on fare payment. Some banks have excluded the option of paying rent or tuition fees from the expenditure limit to waive the annual fee.
